Davis Polk Discusses Second Circuit Reversal of LIBOR-Based Fraud Convictions

On January 27, 2022, the Second Circuit reversed the wire fraud convictions of two traders for their purported roles in the London Interbank Offered Rates (LIBOR) manipulation scandal, which previously resulted in a number of resolutions by banks.  In United States v. Connolly, the Second Circuit held that there was insufficient evidence to prove that the traders’ requests for LIBOR rate submissions to colleagues were false, fraudulent, or misleading.  The court’s reversal marks the likely end to this highly publicized case and signals potential challenges for prosecutors seeking wire fraud convictions in the context of index manipulation schemes.

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